Housing White Paper – Government, Housing and your Home

The housing market is front and centre of political debate at present. With the launch of the Housing White Paper, the Government has signalled a clear commitment and intent to tackle the severe housing shortage. The widest ranging paper ever is seeking to tackle four areas: planning, construction, choice of renting or buying, and help to get on the ladder

For the first time buyer, the Housing White Paper is of huge importance. If we can see the planning system facilitate more homes and if faster construction process increases delivery, then this will have an impact on affordability. This is aside from government initiatives that already exist, such as Help to Buy.

The majority of new properties will naturally be leasehold, because blocks of flats afford an opportunity to create a large number of homes in the most efficient space. The Housing White Paper has signalled the intent to relook at Commonhold as an alternative tenure to leasehold and encourage the development market to embrace it. Of course, for you in your first home, it is still a matter of communal living, and having the buildings well managed is essential.

Leasehold property is a complicated way to own a property, but if you have knowledge and awareness of your rights and responsibilities, then you are better equipped to enjoy your home. If you have knowledge on leasehold, then you can better know when things are right or wrong.

Choice of tenure is an area where the Government has now nailed colours to the mast for encouraging the professional build-to-rent sector to flourish alongside the home ownership ideals. The really exciting part of the White Paper is the desire to help leaseholders. What this help will look like is yet to be seen in detail, however, and there will be further information to follow. What we know for sure is that the Government are committing to addressing the excessive ground rents that have become prevalent. We know the Government wants greater transparency and fairness in the management of properties.

Coupled with the Government activity, there is a media spotlight on ground rents and leasehold houses. Developers are now committing to ensure that houses are sold freehold where possible and avoiding the temptation to achieve extra revenue streams from the ground rent investment value.

This can all sound complicated and slightly crazy. But, for those of you who have played MonopolyTM, that is what is happening day in and day out with financiers and institutions within the property market. Bricks and mortar offer a secure revenue stream and an opportunity to achieve solid income returns. The emotive part is how this looks, considering it is dealing in people’s homes.

Of course, the depression of 2007 was all to do with mortgages on properties, where people were ill-equipped to meet the repayments – called sub-prime mortgages. So, in reality, financial engineering and investment streams for pension funds will use property to provide their returns.

Perhaps, therefore, we need to take a step back and look at the ownership process, to better understand what really is needed to ensure home owners in leasehold are all treated fairly, and that they know they are treated fairly.

The Leasehold Advisory Service recently had a leaseholder conference. It was free to take part and well attended. All the questions raised from the audience on the evening related to properties where the leaseholders owned the building, so they had no landlord in effect. What is particularly interesting about this, is the fundamental point that communal living is not for everyone.

One element that all the legislation in the world will not cure is the ability for people to get on, or for people to accommodate each other. If someone doesn’t want to spend money, any budget for service charges is too much. If someone is controlling, anything could cause upset and conflict. Some people are just not cut out to live in blocks of flats.

If we look back to the start of the buying process, then we really need to have estate agents better educated on leasehold, and the obligations and commitments it presents. This requires the National Association for Estate Agents to engage and drive better knowledge within estate agents and to pass on to buyers the salient information about the leasehold properties.
In summary, the Housing White Paper and the commitment of the Government to drive the housing solutions is to be warmly welcomed. What is needed is the developers, planners, property managers, investors and, of course, the estate agents to all work together to deliver a strong and well-supplied housing market. Can the shortfall of homes be tackled? Well, in short, yes it can, but it will take fundamental changes. Let’s hope the market rises to the challenges.